LEEDS, Alabama -- The Leeds City Council on Monday night voted to give $500,000 to Leeds City Schools -- funding city officials said the schools lost when a judge approved a property tax reassessment for the Shops of Grand River outlet center.

The school system in November learned that because of the reassessment they would lose $110,000 in funding annually and were on the hook for this year and last, a total of $220,000, said Superintendent John Moore. The school system has an annual budget of about $13 million.

"We run on such thin margins, it hurts," Moore said.

To provide the $500,000, Leeds Mayor David Miller said the city worked out an arrangement with Daniel Corp. and USS Real Estate, the companies that built the shopping center and are planning thousands of homes on 6,500-acres as part of the development.

The developers and city also reached an "open ended agreement" on the widening of Rex Lake Road from the I-20 interchange to Zeigler Road, a $1.2 million project intended to help prevent the initial residential development adding to traffic congestion.

Miller said the widening work will now happen when the city can afford to pay for it.

The situation arose, Miller said, when the outlet center sought a property tax re-evaluation from Jefferson County. According to Miller, the shops were awarded a portion of what they sought. The case then went to court and the shops were awarded a larger amount of money, Miller said.

"This all started two years ago, but we didn't know it was happening because that was during the previous administration," Miller said.

According to court records, Leeds Retail Centers, LLC filed a suit in
Jefferson County court in November 2012 to appeal the market value set
by the Jefferson County Board of Equalization.

In October
2013, records showed, the centers and the board agreed upon a settlement
setting the value of retail centers at a total appraised value of more
than $41 million and the total value of several vacant parcels of land
at about $4 million.

The change will cost the city $76,000 in property tax this year and about $30,000 a year each year going forward, Miller said. The city can afford to take that hit, Miller said.

"The board of education could not," Miller said.

"I hope this will put the school system in the financial area it needs to be," said Council Member Kenneth Washington.

Moore thanked the council for providing the funds.

"It's humbling you all support our schools," Moore said. "Some places in the state, that doesn't happen."